(CNN) -- British advertising executive Rory Sutherland says advertising has the potential to make our lives better, at times at much lower cost than the solutions normally cooked up by business executives and governments.
In his talk at the TED Global conference in July, Sutherland ranged widely over lessons in marketing for good and evil, from Frederick the Great's ingenious marketing of the potato to the effectiveness of signs that track a motorist's speed. Sutherland, a former classics teacher, joined Ogilvy & Mather's planning department in 1988. As a copywriter, he worked on Microsoft's advertising and was an early advocate of the power of new media to change behavior. He blogs here
In recent interviews with TED writer Shanna Carpenter, Sutherland discussed his view of advertising and consumer behavior.
TED: You call yourself an "Advertarian." Would you like to explain what that means?
Sutherland: Now, there's a thought experiment that behavioral economists perform, one in which a man invents a brilliant new way for scanning X-rays -- so you can do cancer scans and X-rays at one tenth of the previous cost and at twice the speed -- and everybody heralds him as a hero.
Then, it's revealed that there isn't any clever technology. All he does is scan the X-rays and then e-mail them off to the Philippines, where highly trained, low-cost employees do the actual scanning of the X-rays manually, just as before, only at one-tenth of the salary.
And the argument that's used by economists is that people are absolutely scandalized by this, everyone thinks this is absolutely outrageous, and "What a terrible man!" Yet, bizarrely, the effects are identical.
The effect of offshoring to a low-wage economy is the same as a technological innovation. Indistinguishable. You might even argue that the second course is better, at least if you're a Filipino in need of a reasonably well-paid job. But, interestingly, we judge them morally on a very different level. We're very subjective about that, and the means and the intentionality make a big difference.
And I have a parallel example, where I say, "Imagine there's a device that costs about 50p [or about 84 cents in U.S. currency] per household, per year, and if you install it in your house, it decreases the chance of a house fire by 30 percent." And everybody goes, "That's an absolutely brilliant idea. I want to buy one of those. And, actually, I think the government should pay for it and they should issue one to all households."
But, it's not technically a device: it's actually a TV commercial. To run the ad costs about 50p per household, per year, and it actually decreases the likelihood of household fires by 30 percent. There is a TV commercial that's had precisely that effect. And then people go, "No, that's not quite the same." And the question you have to ask is, "Why is it not the same?"
In other words, why do we regard solutions that involve, to a small extent, tampering with our heads or just supplying information or supplying persuasion ... why do we regard those solutions as lesser value than those that involve technology, for example?
It's not that marketing-driven or advertising-led solutions can solve everything. That's absolutely not true. What seems strange to me, though, is that people don't at least try them first. Instead, governments try to solve their problems by compulsion. My view is that we should try and solve the problem by persuasion, and if that fails we can try compulsion or harder-level nudging. For this reason, I think the book "Nudge" is one of the most important books of the last five to 10 years.
One of the small successes of my TEDTalk is that it's now Conservative Party policy to spend no more money on speed cameras, but to spend the money on those vehicle-activated signs instead. So, I've had a small amount of advertarian success, with at least the prospective next government here in Britain. I'm purely philosophical about this. I'm not an advertarian in the sense that I believe that all problems can be solved this way. But, I think it's best just to try.
Technology makes for easier persuasion and nudging -- what B.J. Fogg at Stanford calls persuasive technology -- and makes it far more potent. So, the British government's Central Office of Information, they've said, "Look we've tried advertising with seat belts for years. It didn't really work. And so, we made it illegal not to wear a seat belt and everybody wore one."
It's interesting, of course, that at the time when we made it compulsory to wear seat belts, there wasn't the technology cheaply available to make a car go "bing" for 60 seconds, or even indefinitely, if you didn't put your seat belt on. Now, I would argue that making it a legal requirement that all new cars go "bing" for 90 seconds if you don't put your seat belt on when you drive off is a nudge, but it's not really an infringement of liberties.
You should always try to solve a problem first through voluntary means or persuasive means before resorting to heavy-handed compulsion.
TED: When you bring up advertising and government, the first thing that comes to mind is President Obama's campaign last year. What did you think of his campaigning style, as well as what he's doing in government right now? Is there anything you think he should be doing differently?
Sutherland: It's very interesting. I think he ran a brilliant campaign using both social media and mass media. It's actually a much more conventional advertising campaign than a lot of people have said.
There was an enormous amount of money spent on advertising. And, it was interesting that to some extent he portrayed himself as the underdog, even though he was better funded than anyone. He played that off very cleverly. Because he wasn't a long-time politician, he could play this game of "little old me" when actually, he had bucketloads of money to campaign with.
What's peculiar in this case is that he's failed to take the American people with him on health reform in the way that he undoubtedly co-opted them and created a popular movement around his election campaign. It must be remembered that, in the United States, there are immensely powerful lobby groups who weren't in action against his election in the same way.
But Obama did have the amazing effect of getting the British to rise up in defense of the National Health Service. The British are mostly critical of the health service and spend a lot of time complaining about it, but when various things came out in the United States more or less suggesting that we have committee meetings to decide whether you die or not, people found that such a ridiculous misrepresentation of the situation that they leapt to the defense of the system.
Now, just bear in mind that by European standards, I'm quite right wing. Not by American standards, but by European standards I'm thought to be quite libertarian and quite keen on free-market solutions. But there is a simple fact that, strangely, you can't point out to Americans, which is that when you go to Canada, it's not like everybody's dying. They pay vastly less for prescription drugs, because they're purchased centrally.
Incidentally, what no one actually says is that the United States spends an insane amount of money on health. A brutally statistical discovery, as found by the statistician Robin Hanson, claims that, above a certain level of expenditure, there is no correlation between money spent on health care and longevity. So, actually, when you spend above a certain amount per person on health, longevity doesn't actually improve. And, Hanson's theory is that excessive intervention by medicine outweighs the benefits of overfunding.
Most people think that the more you spend on health care, the better your health care is, but it's not true. Now, it's not that every heart surgeon is going, "Oh yes, a couple more of these heart operations and I'll be able to pay for a yacht."
Rather, if you've spent 40 years practicing heart surgery and becoming a brilliant heart surgeon, you are unusually biased towards seeing solutions in heart surgery, just as legislators are overly biased to seeing solutions in legislation and people who are engineers are overly biased to seeing the solutions to the world's ills lying in engineering.
And so, overmedication and excessive intervention by doctors in the United States is probably a downside of how much money is poured into health care. The bias to intervention is always there in a case where you can either do nothing or do something. People always prefer something. The doctor's recommendation of "Actually, I'd just leave it. It'll probably go away," is never one with which people are comfortable.
TED: Of all the fields you could have gone into as a young man, after studying classics at Cambridge, why did you choose advertising?
Sutherland: It's an interesting area. It's a business, full of its faults (and there are many irritating aspects) but what attracted me was the opportunity to learn a job that encompasses both art and commerce. That's very rewarding. Traditionally, you're forced to choose between these two cultures. You either attempt to secure government grants to make funny shapes and figures or you sit around and stare at spreadsheets all day. Advertising let me extract the most pleasurable aspects from both these worlds.
I've never been one of those people who are dismissive of the scientific method. I've found it very interesting to swap sides and to jump between two houses. In advertising, you spend your life in the quest to understand people better, but always with an eye on commerce.
The rising field of behavioral economics is another area I find fascinating, and it draws on both psychology and traditional economics. In general, today's most interesting questions and ideas come from the collision or intersection of different schools of thought. Of course, my critics would say that I'm a dilettante and simply unwilling to commit.
TED: But these really are interesting areas.
Sutherland: I think it's very important that we have more thought like this, because there's an element in which business is becoming autistic. Every decision has to be justified in rational terms and figures to somebody else, and then justified again to somebody else and then again to someone who makes the most rational decision possible. The human aspect of the decision tends to be lost in the translation.
I believe that we need to begin solving problems by persuasive, nudging means rather than heavy-handed laws. I think we don't do this because society has a tangibility bias: People are much more comfortable solving the problems of the world by engineering ridiculous and expensive things, rather than looking for a simpler, human solution.
For example, I think call centers are the worst, most archaic forms of doing business. BT, the British telephone company, does business through Twitter. They address complaints, as other companies do, but if you ask a question they will also get back to you. It may take 30 to 35 minutes, as would a phone call to customer service, but in the time that you're waiting for an answer you can get on with your life instead of listening to bad music. Most companies don't think of these things. We're experiencing an empathy shortage.
So, the question is, to what extent do we go on focusing on increasing economic growth metrics? Bringing a train journey from 18 to 3 hours is good, but from 3 to 2.5 hours is just silly. Instead, why not put screens in the seat backs so passengers can watch movies and provide Wi-Fi? These are interesting questions to be asked in corporate decision-making. Are we creating a corporate Asperger's syndrome?
TED: What do you think of the popular series "Mad Men"? Is the advertising world still quite as sexy as it was back then, or has it evolved?
Sutherland: Really, "Mad Men" is a very clever use of advertising as a backdrop against which to set the social change of that era. Imagine "Mad Men" in a legal setting or a bank. It wouldn't work. But there's a trend: The portrayal of the advertising executive as an indecisive juror in "12 Angry Men," "The Man in the Gray Flannel Suit," "North by Northwest," another Cary Grant portrayal in "Mr. Blandings Builds his Dream House," the character of the husband in "Bewitched." It's an interesting Hollywood staple. It's a lot less boring than banking if you have to feature a few minutes of an office.
Also, the show may not be that realistic. Many agencies were much more puritanical than it depicts. Some wouldn't even take liquor or tobacco accounts for religious reasons. I've heard completely contradictory reports on this.
With respect to alcohol, it may have been simply a general New York trend. I have a friend who traveled there as a 19-year-old girl around that time, and was handed a pint-sized martini at her first party.
The world used to be a good deal more naughty. You were in the minority if you didn't smoke and were in the Creative Department in 1980. Smoking in an office meeting did not conk out completely until 1997. People came from California and would smoke 40 cigarettes a day because they were so excited that you could smoke indoors.
That brings up an interesting point about today's businesses. I think it's been a very bad thing that all remuneration is now, typically, in the form of salary. Even organizations with the profit margins of Goldman Sachs, for example, do not spend on merriment.
When people are given company cars and expense allowances, it leads to a much less Puritanical approach to life. It's not so much about the booze, but that the company is providing more than just your salary. In terms of pure merriment, it's much more important to have all the trappings of wealth, rather than the wealth itself.
The sexiness of the thing is interesting. Businesses have become more profitable and less sexy. Accountants have a stranglehold over everything. I don't think being a pilot is as sexy as it used to be either. Life has become immeasurably better for the consumer, but for the employee has become worse.
Your employer simply paying you well and nothing else is actually the beginning of a bad relationship. When a relationship is entirely transactional, it's hard to form bonds of affection. It's like being married to someone who only brings you flowers when they want sex.